South Africa Banking & Financial Services Report Q4 2017

South Africa Banking & Financial Services Report Q4 2017

BMI View: The South African banking and finance sector has not escaped the effects of the economic and political turmoil currently gripping the country, despite its worldwide reputation for its strong regulatory infrastructure and relatively robust fundamentals. In 2016, the sector's net value added (NVA) grew 7.4% in local currency terms to ZAR371bn, but the decline in the value of the rand meant that in US dollar terms it contracted by 6.7% to USD22.3bn. Greater stability in the rand should see the sector's NVA rise by 16.0% and 6.6% in US dollar and rand terms, respectively. By 2026, the size of the sectors NVA is forecast to reach ZAR787.4bn (USD52.1bn) with positive growth rates throughout the forecast period.

Although the sector has proven to be highly resilient in the face of crisis, South Africa's commercial banking sector will continue to see weak growth and profitability in the coming quarters. We have long highlighted that a sluggish economic recovery and elevated political uncertainty would offer headwinds to the sector's expansion. This will only be exacerbated by the downgrade of the South Africa's foreign currency government bond rating to sub-investment grade by all three major credit ratings agencies in April, which will increase borrowing costs for lenders. Indeed, after average credit growth of 7.8% between 2011 and 2016, we forecast a 3.5% expansion in 2017, only moderately recovering to 5.0% in 2018. Despite sluggish asset and loan growth, we see little systemic risk to the country's well-capitalised banking system.

BMI Industry View
Banking & Financial Services Industry View
Table: Financial Services Forecasts (South Africa 2015-2020)
Table: Financial Services Forecasts (South Africa 2021-2026)
Banking & Financial Services
Banking Snapshot
Forecast Scenario
Forecast Tables
Table: Key Banking Forecasts (South Africa 2015-2021)
Table: Assets Forecasts (South Africa 2015-2020)
Table: Assets Forecasts (South Africa 2021-2026)
Table: Liabilities Forecasts (South Africa 2015-2020)
Table: Liabilities Forecasts (South Africa 2021-2026)
Table: Key Ratios Forecasts (South Africa 2015-2026)
Competitive Landscape
Table: Top 10 Commercial And Retail Banks By Total Assets, ZARmn
Table: Top 10 Banks - Asset Quality
Table: Top 10 Banks - Earnings & Profitability
Table: Top 10 Banks - Capital & Leverage
Table: Top 10 Banks - Funding & Liquidity
Regulatory Enviornment
Insurance Snapshot
Table: Gross Insurance Premiums Written (South Africa 2015-2020)
Table: Gross Insurance Premiums Written (South Africa 2021-2026)
Competitive Landscape
Table: Top 10 Life Insurance Companies By Gross Premiums, USDmn
Table: Top 10 Non-Life Insurance Companies By Gross Premiums, USDmn
Regulatory Enviornment
Asset Management
Asset Management Snapshot
Competitive Landscape
Table: South Africa's Largest Unit Trusts, end-2016
Table: Ranking of Asset Managers, by Morningstar
Regulatory Enviornment
Stock Exchanges
Stock Exchanges Snapshot
Table: Johannesburg Stock Exchange, Market Profile, June 2017
Competitive Landscape
Table: Top 20 Listings By Market Capitalisation, end-July 2017
Regulatory Enviornment
Macroeconomic Overview
Economic Analysis
Table: Key Provisions In The New Mining Charter
Macroeconomic Forecasts
Table: Macroeconomic Indicators (South Africa 2016-2026)
Household Income Forecasts
Table: Household Income Data (South Africa 2015-2021)
Demographic Forecast
Demographic Outlook
Table: Population Headline Indicators (South Africa 1990-2025)
Table: Key Population Ratios (South Africa 1990-2025)
Table: Urban/Rural Population & Life Expectancy (South Africa 1990-2025)
Table: Population By Age Group (South Africa 1990-2025)
Table: Population By Age Group % (South Africa 1990-2025)
Industry Forecast Methodology
Sector-Specific Methodology

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